welcome to "the wall street journal report." i'l laria bartiromo. a symbol of american capitalism set to change hands. who hs planning on buying the new york stock exchange and why. the fiscal cliff clock ticking down. real estate roars b@cj. what it @ll mdans for your mo y money. the hottest holiday toys. the kids at heart and why everything old is new again. the "the w@ll rtredt journal repo" begins right now. >> this is america's number e financial news program, "the wall street journal report." now, maria bartiromo. >> here's a look at what's making news as we head into a new week on wall street. big changes for american icon. a symbol of capitalism and wall street. the new york stobk exchangd d i being sold to i.c.e., atlanta-base derivatives

trading exchange. the deal valued at $8.25 billion. profits at the nyc h@s shunk, lower trading volumes. i.c.e. is interested in the nyc because of the lower-based derivative exchange. the market could not make its mind up this week. the dow posting the first back-to-back triple digit gains since july. followed up with the worst day in a month. all the moves based on, well, whatat else, sentiment around t fiscal cliff deal. the economy though is looking stronger than many analysts expected. the gross domestic product was revised upwards, up from a previous level of 2.7%. the gdp is the broadest measure of the size and straeength of t u.s. economy. the treasury department announces a plan to sell remaining shares to gm. that after bailing out the giant automaker.

it will cost taxpayers $12 billion but saved more than a million jobs in the industry. it's not much time left before the bush tax cuts expire and the automatic spending cuts kick in. the dreaded fiscal cliff that will likely have a powerful impact on the economy can washington actually come to an agreement and what's going on behind the scenes? don peebles, chair monday and ceo of the peebles corporation, don was a leading fund-raiser for president obama. good to see you. >> thank you. >> a lot of drama happening in washington. let's talk about the fiscal cliff. what's your take on how this plays out? now with just a few days left in the year to get this deal done. >> i don't think they're going to come back after christmas. i think that we will see them back in early january to make a compromise. i think that comp promise is gog be in between where the president is and where the speaker is. >> you say ve go off the fiscal cliff then? >> yes, do. >> do you think we will see the

economy hit recession? that was the expectation, right? >> no. that is the expectation but i don't think so. i think there's been a lot of drama, especially on the tax increase side. the tax increase side is do symbolic. at the end of the day it's not going to have any impact on the deficit or controlling our spending. what's going to have to happen is the spending cut. i think that's where the speaker was having difficulty getting support, is not being specific about where these cuts are coming from. >> where should the cuts come from? i mean, weear a lot about medicare and medicaid and social security being the drivers of the debt. do you have to make significant cuts in the entitlements to really make a difference? >> if not cuts immediately, structural changes. and that's a problem with the government. that's a problem with this congress in particular. is that they wait until the last minute and they try to cram all this stuff down instead of making a structural change. what needs to happen is a structural change of medicare, social security andedicaid and we need of look at the other

spending areas as well. we're still talking about less than 40% of the government and we really need to look at the entire government and they can't do that in 2 20 days of helter skelter rushing. i'm hopeful they will come to their senses, do a short-term temporary measure and have a comprehensive review in n the first quarter of next year, like any business would do it. >> you make a a lot of sense, d. it jtst seems like we need structural change to these programs because we can't afford them the way they're going right now, right? >> that's right. and american's lives have changed. social security was a very good idea and still is a good idea but we're living a lot longer now than when social security was originally started. so we're much more productive. for example, i see people every day who are working in their 70s and 80s, yet alone retiring at 65 years old. i think there when someone else for social security has to change as well. we have to update these it ine e

entitlements based on where human beings are now. >> don, i want to talk about the underlying economy, really what's going on because we hear so much about housing having bottomed. so amidst all of this uncertainty that we're talking about in terms of the fiscal cliff you've got some strength happening in the underlying economy. the worry is that reverse it is we go over the cliff. talk to us about real estate and housing. you're so uniquely qualified to talk about this in so many different cities. >> you look at housing and it's the bright spot of the economy. i think it's going to help propel our economy back. miami, for example, one of the first to go down deeply along with las vegas. we operate in both of these cities. prices are up in las vegas now 7%. and miami, 8%. so you're seeing tremendous upside in housing. >> these a some of the areas that really plummeted. >> yes. >> yes. so they're coming back? >> yes. >> low bases. >> but in san francisco is coming back as well. miami roared back. miami's inventory is lower than it was at its peak. the price increases are

happening more prrapidly than t last peak '06. >> fascinating. how important is this for the overall economy that you're seeing these hot spots of real gop development and bursts of economy in certain cities. >> one, of course, the inventory shrink and prices increase, greater demand for any construction. most america's networks are tied up into their homes and their net worth has gone up so they're optimistic about the economy and will begin to spend well. people can start speelling thei homes and move to other places where there's jobs. there's going to be a free up of entry level housing as well. i think it will be a good year. i think if the government can just get out of the way, go ahead and tell us what the rules are going to be, whatever they're going to be, make the rules. step up to the plate and about responsibly and make some decisions. tinge free market system and the small business owners will make it work. >> are a lnt of people in business talking about what's

going on with guns and the potential for new gun legislation? i mean, this week we saw sporting chain dick's stop selling assault rifles. private equity firm selling the interest in the freedom group, a gun company, all in the wake of trat tragedy that we're still in mourning over in connecticut. do you think we will see real change in gun laws? >> yes, because i think the president is committed to bringing something forward quickly. senator feinstein is bringing something i, as well. i don't think there's any businessperson that i've come across over the last week or so that has not talked about what's happened here and talked about guns. and there is no case to be made for some reasonable basis to have assault weapons in the hands of the average ccitizens. there's no rational case for that. this is another example of where the lawsws get outdated with modern society. we talked about social security. let's look at gun control, the right to bear arms. sure, when we were protecting ourselves in the embryonic

stages of our nation's founding but today where does that stop in does it mean we can have mini nuclear weapons at home, too? the right to bear a arms has toe reflective to what the founding fathers ha mind. they lad no idea people would have rapid mng guns in their homes. >> you make sense. don peebles joining us. up next on the "the wall street journal report," it's not too late to bye alast-minute holiday gift for the kids on your list. and whenn it comes t to the hottest stellars, he's not playing around. and lar, gifts any time of year, the why and how behind the art of doing good. as we take a look at how the stock market did. i always wait until the last minute. can i still ship a gift in time for christmas? yeah, sure you can. great. where's your gift? uh...

whew. [ male announcer ] break from the holiday stress. ship fedex express bdecember 22nd for christmas delivery. military families face, we understand. at usaa, we know military life is dhfferent. we've been there. that's why every bit of financial advice we offer is geared specifically tourrent and former military members and their families. [ laughs ] dad! dad! [ applause ] ♪ [ male announcer ] life brings obstacles. usaarings advice. call or visit us online. we're ready to help. can i still ship a gift in time for christmas? yeah, sure you can. great. where's your gift? uh... whew. [ male announcer ] break from the holiday stress. ship fedex express by december 22nd for christmas delivery.

what is playing well in the 2012 holiday shopping season this time of year represents about 20% of annual retail sales. meeting tough competition for consumer competition. my next guest hopes that leaves room for fun as well. jerry storch is with us, ceo of toys "r" us, dedicated toy retailer. jerry, it's always nice to see you. great to see you. >> great to be here. >> does all the drama over the fiscal cliff and this uncertainty about the economy weigh on consumers? how are you expecting the season to play out? >> well, i don't have any doubt that it does weigh on consumers. it's on the news constantly, people worry about it. having said that, we're talking about christmas here. this is no minor holiday. >> right. >> so christmas is going to come on tuesday. it is christmas day. and consumers have to get shopping. the last thing that parents want toto cut back on the s. the holiday present for their child for christmas. >> it's true. i want to go through the toys that you bught. what are you expecting?

anything that we should look at as far as the real gauges? >>well, you know, it's all going to come down to the last weekend, to the last few days. >> even christmas eve. >> even christmas eve. at toys "r" us just to make sure, we are open 24 hours all the way through, until 10:00 p.m. christmas eve night. plenty of time. you haven't bought the toy, get out there now, get off the couch, go to toys "r" us. we're open all night. >> that's good, 24 hours. wow. >> 24 hours. >> does that really help, being open? that was the debate around thanksgiving, right? people were like, save thanksgiving, we we don't want to shop on t thanksgiving night >> no doubt that it helps this time of year. a lot of people procrastinated. we have the most number of days between thanksgiving and christmas you can possiy have. early thanksgiving, followed by christmas that last year was on a sunday, this year is not until tuesday. people are waking up now and realizing, oh, my gosh, christmas is coming on tuesday. >> it will come. every year toys "r" us makes a

hot toys list. tell us what you anticipate to be the hot sellers. >> i brought some things that are updated as of this moment. >> i love it. >> as of two days before christmas, these are the must haves that you need and we've got them in stock at toys "r" us. >> legos. >> legos have always been hot. people love legos. they have the best licensesthe bert properties. we have teenage mu tant ninja turtles. it just came in. kind of next year's product this year. all the actinn figures we have are selling out like crazy. this is legos teenage mutant ninja turtles. >> you say it's the largest toy company. >> by far the most rapidly growing company. penple love legos. there's a learning component to it. people think it helps the br@in. >> i brought lego friends here. >> cool. >> lego has struggled with girls

throughout the entire existence unl now, until this year. lego friends iroing f fantastic with girls. it h@s little dolls that you construct, as well as this is lego friends summer riding cap. girlses just love horses. this haseen a run away hit, lego friends for girls. >> you have mutant teenage ninja turtles and lego girls. and a bug nbliterator. >> space theme for lego this year. and, again, is something that we've got first to market. it just brought in from the stores over the last week or two. it's really nextyear's product this year because we're so close to chrhstmas we're able to get some sneak peeks of new products like this. this is going tn be a big rp@ce thing for lego for next year. they have really c complex stors built into each one of these. you ban read about them online about why there are obliterating bugs in outer space. >> what else is on the hot toy

list? >> we have if dream lights, great for a younger kid. you may have seen these on television. whole variety of them. they make light patterns and unds on the ceiling and help children at night. >> so this is infant? >> this is preschool, we call it. but infant to preschool. this is from jake and neverlands pirates, disney jr. property this year. thhs ir the musical ship bucky. this is the pirate ship from that series. again, this is preschool up to the young toddlers. this is a fantastic toy, too. >> love ht. >> finally, t to be left out, i brought angry birds air swimmer 'this is radio control air swimmers. what that means is is that the fellow in red there actually flies and he c@n be controlled with this radio control. >> remote control. >> remote control so attack the other one. you can dive nr climb. and he swims with his tail there. you can see him swimming. attack the other one. this one is the, you know, if you play the angry birds, this is the one that you're knocking down and he'r the guy who is

doing it. >> incredibly popular. >> it'r so much fun. even the crew here when we were starting to fell this, they all flock to that one. they all want the flying angry birds. why not? talk about bringing a virtual world to the physil world and making it real life, there you have it. >> what great toys. >> a lot of fun. christmas is here! go shopping! >> jerry, good to see you. thank you so much. >> nice to see you. >> have a merry christmas. happy new year. jerry storch, toys "r" us. up next on the "the wall street journal report," help giving back. the h hard work doing good lead to its own rewards. today's workplace is fulll f new challengeses. to make things's your for the rest of the year, joseph a. bank is pricing all 100% wool executive suits and collect sports coats at just $200 every day.

doing good isn't business as usual in today's world. it requires the same prurlial zeal demanded by start-ups. my next guest has seagrams and the montreal expos and has advice for turning a passion into action. charles bronfman and jeffrey so solomon are the co-authors of "the art of doing good." who is the primary audience for this book? >> this one is for everybody because what we've done is highlight 18 social entrepreneurs who started with nothing, and to show all the problems that they went through and how they made it and in one or two bases didn't quite make it. >> it's a great way to look at

it. 18 social entrepreneurs you want to offer a game plan for launching effective non-profits. what's social entrepreneur? tell me the way the skills can be useford doing good? >> the dynamics are the same except there aren't capital markets for the social entrepreneur. there isn't the financial potential, bottom line, for the social entrepreneur but the social entrepreneur is driven by th same passion of an idea of how do we make the world better in a more effective way. so one young man jordan who we feature was in optetry school in south africa and put glasses on a 7-year-old nearly blind and saw his life change and he decided he's going to become the lenscrafters for the third world. >> how wonderful. that's a great story. were you inspired yourself b by

some of these individuals? what did you learn? >> oh, yes. oh, yes. well, you learn that if people have had tragedy happen to them or if there is something in their lives that influence them mightily, then if they have more than just the normal amount of courage and more than just the normal amount of passion, they took this difficulty and turned it into somethg that did good for others and saved other people's lives. >> charles, you've signed the giving pledge originated by bill gates and warren buffett, promising to give away half of your fortune to clarity. >> it's not an unusual thing actually in this country because think that what they are really saying to people, you have a choice of two things. when you die you either give your fortune or as much as you want to your fortune to things you care about or give it to the government. so it's not that tough of a decision.

but that said, i think it will get a lot of people to give more than thex have thought of heretofor. >> so you are currently spending down the endowment of the andrea and charles bronfman ilanthropies. why put yourself out of buriners? you make a great point. you make a great point, either the government or give it to where you want. >> i tell you, there's another thing. i could talk all kinds of wonderful things, i didn't want to rule from the grave. but actually after the disaster we had to make a decision. let jeff tell you how we went about that. >> the default with the foundations is they're going to go into perpetuity. perpetuity is a long time. and we know from many foundations today that the donors' intent does not continue for many generations. and the energy and the passion in the giving doesn't necessarily continue. so we're seeing, and bill gates

is a perfect example, bill and melinda decided their foundation will spend down within 50 years of their death. we have seen more and more foundations use the spin-down to have more resources for today's problems and focus dramatically on what ey do. >> jeff, are there particulars areasf nee or charity you would like to see increased entrepreneurship, anything that looks prime for innovation to you right now? >> yeah, the genius of american philanthropy which leads to world by far is the one volunteerism. number two, as the american industry innovation. so i think we are seeing in, for example, education, dramatic change taking place in terms of charter schools, in terms of focusing on stem -- the science technology, engineering, and math. things that will transform american education which will

transform the american economy. >> this is a very good point. and a lot of, right now, across the country seeing certain areas become rewired for what you're talking about, technology and schence. gentlemen, thank you very much. >> thank you. great to have you on the program. charles bronfman and jeffrey saloms solom solomon. up next, the news that will haveve aimpact on your money and whatutton wood tree and ice whatutton wood tree and ice have in common.

we have some big news to

tell you about beginning in january we ll have a new home. look for "on the money with maria bartiromo." we will exciting new segments for, you great guests and, of course, i will be here as well. join news january. first, look at the stories coming up in the week ahead that may move the market and impact your money this week. monday is a shortened trading trade on wall street. the noshl stock exchange and nasdaq is closing early for christmas eve. and tuesday, of course, is christmas day. all markets are csedn observance of the holiday. the rest of the week light on economic news. wednesday's s&p shiller index will tell us about b home price changes. and the month of november will be out. earlrlier in the program we told you about the deal in which the new york stock exchange will be acqcquired by the i.c.e. in 1792 24 of them got together and established rules for buying and selling stocks and bonds. the exchange opened its doors in the current address.

but as electronic trading came in and volume slowed the new york stock exchange looked for a partner. and now it has one. the deal really the end of an era. that's it for today. anks for jning le. next week, a look back at the stories, the stocks, and the people who made 2012. each week keep it right here on wall street. have a great week, everybody. have a merry christmas. i'll see you next weekend.